Building Stability in Latin American Financial Markets

Liliana Rojas-Suarez and Steven R. Weisbrod

No 4028, Research Department Publications from Inter-American Development Bank, Research Department

Abstract: This paper argues that the investor reluctance to make long-term commitments to Latin American financial markets results from experience. In the 1980s, while ex ante real interest rates on Latin American financial assets were usually high, ex-post real interest rates were often highly negative. In the 1990s, policymakers instituted stabilization programs and structural reforms that have improved the environment in which financial markets operate. Based on a review of experiences in the region, this paper shows that, when these opportunities are taken, investor confidence in long-term markets is strengthened.

Date: 1996-02
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Citations: View citations in EconPapers (23)

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Working Paper: Building Stability in Latin American Financial Markets (1996)
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